InterOil accused of deviating from Gulf LNG project

By MALUM NALU

InterOil has been accused by state-owned Petromin of ‘staging’ the Gulf LNG project and not ‘delivering’ as per agreement with the government,

The controversial and much-delayed Gulf LNG project took a new twist yesterday (Tuesday) with state-owned Petromin PNG Holdings accusing InterOil and Liquid Niugini Gas Ltd (LNGL) of deviating from delivering the project.

This follows Prime Minister Peter O’Neill’s denial of releasing any statement in support of the project, following the release of a statement by one of his staffers, Susuve Laumaea last Friday to this effect.

The statement released by Laumaea, a former InterOil employee, said O’Neill supported the InterOil-led Gulf LNG project, which the prime minister has denied saying.

Prime Minister’s media advisor, Daniel Korimbao, told The National yesterday (Tuesday) that Laumaea might have misunderstood a conversation he had with O’Neill regarding the Gulf LNG project.

He said the government supported InterOil, however, did not support the company’s new development proposal or the continuous final investment decision (FID) deferrals.

“The government of Papua New Guinea recognises the license released to InterOil,” Korimbao said.

“The project has the full backing of the government.

“The government, however, does not support the new development proposal put forward by InterOil.”

Petromin chairman Brown Bai released a statement yesterday commending O’Neill for clarifying government’s position on development of the Elk and Antelope gas fields in Gulf province, as well as taking a swipe at InterOil and Liquid Niugini Gas.

“InterOil and Niugini Gas Ltd have deviated from delivering the project in the project agreement,” he said.

“They cannot change the goal post and disregard their contractual obligations.

“I urge InterOil and Liquid Niugini Gas to respect Papua New Guinea’s laws, systems and processes, including accepting that the National Executive Council has rejected the Gulf LNG project as proposed by them.

“InterOil and Liquid Niugini Gas should be working with the state to deliver the project in the project agreement.

“Now that the prime minister has clarified the position, Petromin is ready to work with the developer and the respective agencies of government, including the Department of Petroleum and Energy, to deliver the project in the project agreement.”

Bai said as the state nominee in the project, Petromin had invested over US$15 million in upstream exploration work and this investment had significantly contributed towards upgrading of the total gas resource in the license.

“The (Petromin) board approved this investment for the project, envisaged in the project agreement, and not for the staged ‘Gulf LNG Project’ as promoted by InterOil and Liquid Niugini Gas,” he said.

“The project agreement signed between InterOil/Liquid Niugini Gas and the state in 2009 is a binding contractual agreement and the parties are bound by this contract to deliver the project, according to the scope envisaged in the project agreement.

“The scope includes a large-scale 7.6 million tonnes per annum (MPTA) to 10.6 MPTA capacity plant operated by an internationally-recognised LNG operator.”